NAB flags advice sale amid wide-ranging restructure

NATIONAL Australia Bank is spinning off its financial advice and superannuation businesses but says the move has nothing to do with the “shameful” industry scandals heard by the royal commission.

NAB, which yesterday reported a 16 per cent fall in firsthalf profit because of restructuring costs, said it was considering options including a demerger and IPO for businesses including those under the MLC brand.

Chief executive Andrew Thorburn said the decision had been unrelated to the royal commission, which has flagged the possibility of forced asset sales after hearing of providers charging for and then failing to provide advice. “There’s a lot of buffeting at the moment and I don’t think we entirely have perspective, so we would not make a decision that’s this major based on a couple of weeks of evidence at the royal commission,” Mr Thorburn said. “Respecting the royal commission’s importance, I think this is much, much bigger.” Mr Thorburn said the move, which should be completed by the end of the 2019 calendar year, was being considered prior to the airing of the “fees for no service” scandal that has rival Commonwealth Bank on the back foot and forced the resignation of AMP’s CEO and chair. NAB has already spun off its lossmaking Clydesdale Bank and sold 80 per cent of its life insurance unit over the past two years.

“This is a major decision for the bank and we would not make it on the basis of some noise and some shameful things that have happened,” Mr Thorburn said. Mr Thorburn said bonuses for selling products and poor character were to blame for misconduct in the financial services industry, rather than the big banks’ ownership of those services.

“It’s not about vertical integration - we’ve had poor advice from people who just do advice - but it’s often about the character and conduct of people,” Mr Thorburn said.

NAB, has owned MLC since 2000, and will continue to operate its JBWere business servicing high-earning clients.

The bank’s cash profit for the six months to March 31 dropped to $2.76 billion after expenses jumped 25.3 per cent due to the cost of an ongoing restructure announced last year. NAB said about 1,050 full-time employees have left.